The Worst Of The Stock Market Crash May Be Yet To Come

Though stronger than expected, the rate of inflation in April slowed for the first time in eight months, but experts still aren’t sure how long it will take for prices to return to normal levels—even if the worst has finally passed.

Overall prices rose 0.3% from March—higher than the 0.2% economists were expecting but much lower than the previous month’s increase of 1.2%, according to data released by the Labor Department on Wednesday.

On a yearly basis, prices jumped 8.3% last month, falling from 8.5% in March but exceeding expectations calling for an increase of 8.1%; the slowdown marked the first month-over-month decline since August.

The overall increase was the result of broad upticks across shelter, food, airline fares and new vehicle prices, while a month-over-month decline of 6.1% in long-surging gasoline prices (which spiked 18% in March) helped offset the gains, the government said.

Core inflation, which excludes volatile food and energy prices, rose 0.6% in April after a 0.3% uptick in March—a “seriously disappointing” jump given expectations for a 0.4% increase, Pantheon Macroeconomics chief economist Ian Shepherdson said in an email Wednesday, pointing out a 1.1% increase in new vehicle prices was “significantly bigger” than in recent months.

In a weekend note to clients, Goldman Sachs economist Ronnie Walker cautioned the inflation outlook remains “highly uncertain” due to lingering supply chains, red-hot wage growth and still-surging commodity priceswith gas prices, for example, jumping to record highs on Tuesday.

The economist expects shelter inflation will remain firm amid the tightest housing market in decades, while price spikes driven by supply chain constraints will “fall sharply” as bottlenecks ease, particularly in used cars and consumer electronics, which saw prices continue to fall in April.

“The slight moderation in inflation will likely provide some needed boost in consumer confidence,” Jeffrey Roach, chief economist for LPL Financial, said in emailed comments Wednesday. “Investors and policy makers both know inflation will likely stay above target for a while but both will focus on the direction of the change.”Stocks fell immediate after the Wednesday CPI report, with S&P 500 futures falling 1.1% by 9:05 a.m. ET, while Nasdaq futures plunged 1.8%.

The reopening economy and fiscal stimulus helped fuel one of the strongest starts to a bull market ever during the pandemic, but stocks have struggled this year as the Fed raises rates and unwinds economic support to ease inflation.

After rising 27% in 2021, the S&P has fallen 17% this year, while the Nasdaq has flirted with bear-market territory, plummeting as much as 26%. “A repricing of stocks is currently taking place due to rising interest rates, which mathematically makes stocks less attractive,” explains David Bahnsen, chief investment officer of $3.6 billion advisory The Bahnsen Group.

I’m a senior reporter at Forbes focusing on markets and finance. I graduated from the University of North Carolina at

Source: The Worst Of The Stock Market Crash May Be Yet To Come, According To Wall Street’s ‘Fear Gauge’ Signal

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Amazon Stock Loses $130 Billion In Market Value After $885 Million Fine And Disappointing Earnings Report

Shares of Amazon fell as much as 8% Friday after the e-commerce juggernaut disclosed a massive fine from European regulators for allegedly breaking regional privacy laws and posted second-quarter earnings results that failed to meet Wall Street expectations, putting the longtime market leader on track for its worst day in more than a year.

Key Facts

As of 11:15 a.m. EDT, Amazon stock has plunged 7% Friday to about $3,349.50, pushing the firm’s market capitalization down below $1.7 trillion and wiping out nearly $130 billion from a closing level above $1.8 trillion Thursday.

Ushering in the massive losses, Amazon posted second-quarter revenue after Thursday’s market close of $113.1 billion—up 27% year over year, but falling short of average analyst expectations totaling $115 billion.

Despite soaring more than 48%, net income of more than $7.7 billion also fell slightly short of estimates, which called for about $7.8 billion.

The stark decline also comes after Amazon disclosed a $885 million (746 million euros) fine, levied on July 16, by the Luxembourg National Commission for Data Protection, which claims Amazon’s processing of personal data did not comply with European regulations.

In the filing, Amazon, which in a statement asserts no data breach has occurred, said it believes the watchdog’s decision is “without merit” and that it intends to appeal the ruling and defend itself “vigorously” in the matter.

Amazon’s Friday plunge puts it on track for its worst one-day decline since the height of pandemic uncertainty tanked the broader market in March 2020.

Crucial Quote

“Consumers’ online shopping levels are returning to more normal levels as they shift some spending to other entertainment sources and offline shopping,” Morningstar analyst Dan Romanoff said in a Friday note. “Meanwhile, the company continues to add capacity [and costs] at a breakneck pace in order to meet customer demand and one day delivery,” Romanoff added, pointing out Amazon has already nearly doubled its footprint during the last 18 months.

Surprising Fact

Shares of Amazon are now down more than 10% from a record closing high of $3,719 earlier this month.

Tangent

Amazon far underperformed the broader market Friday. The Dow Jones Industrial Average, which doesn’t include Amazon, ticked down just 0.2%, while the S&P 500, which counts the retail giant as its third-largest component, fell 0.4%.

Chief Critic

“Maintaining the security of our customers’ information and their trust are top priorities. There has been no data breach, and no customer data has been exposed to any third party. These facts are undisputed,” Amazon said in a statement Friday. “The decision relating to how we show customers relevant advertising relies on subjective and untested interpretations of European privacy law, and the proposed fine is entirely out of proportion with even that interpretation.”

Further Reading

Amazon hit with $886m fine for alleged data breach (BBC)

Follow me on Twitter. Send me a secure tip.

I’m a reporter at Forbes focusing on markets and finance. I graduated from the University of North Carolina at Chapel Hill, where I double-majored in business journalism and economics while working for UNC’s Kenan-Flagler Business School as a marketing and communications assistant. Before Forbes, I spent a summer reporting on the L.A. private sector for Los Angeles Business Journal and wrote about publicly traded North Carolina companies for NC Business News Wire. Reach out at jponciano@forbes.com. And follow me on Twitter @Jon_Ponciano

Source: Amazon Stock Loses $130 Billion In Market Value After $885 Million Fine And Disappointing Earnings Report

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Critics:

With technology stocks garnering renewed scrutiny, it’s helpful to take a look back at one company that has weathered some of the most severe market downturns and serious doubts from Wall Street: Amazon. Betting on the online bookstore wasn’t always a sure thing. Amazon’s journey from tiny garage start-up to one of the most valuable companies in the world has paid off for investors, but shareholders needed a strong stomach.“Earth’s Biggest Bookstore”

In the early 1990s, Jeff Bezos walked away from a Wall Street career with an outlandish idea to sell books on the World Wide Web. In 1994, he launched Amazon.com. “I found this fact on a website that the web was growing at 2,300 percent per year,” Bezos told CNBC in a 2001 interview about his early foray into book selling. “The idea that sort of entranced me was this idea of building a bookstore online.”

The site experienced growth quickly, going public three years later with $16 million in revenue and 180,000 customers spanning more than 100 countries (according to its SEC filing). But even as the site began growing, many investors had their doubts about Amazon, instead favoring brick-and-mortar book-selling giant Barnes & Noble.

At an early meeting between Barnes & Noble Chairman Leonard Riggio and Bezos, Riggio reportedly told Bezos he would “crush” Amazon. Barnes & Noble dwarfed the young start-up. The traditional bookseller had hundreds of stores and more than $2 billion in revenue. It was also tapping into major Silicon Valley talent to built its own sleek new website.

On top of that, it was suing Amazon over the start-up’s claim to be “Earth’s Biggest Bookstore.” But for those who took a chance and bought Amazon stock at the initial public offering, their investment has returned a compound annual growth rate of 38 percent since the IPO – outperforming the S&P 500 which had a total return of 10 percent annually over the same period.

Tech stocks have been under renewed pressure in recent weeks as the markets have experienced volatility. From September to November, Amazon stock lost a quarter of its value as the wider tech sector took major hits. Some analysts say it’s a good time to buy in. Others say Amazon’s growth rate has hit a ceiling as the company enters maturity.

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It’s Not Just Crypto Crashing: Here Are All The Market Bubbles Popping So Far This Year

Stock exchange market display screen board on the street showing stock market crash sell-off in red colour

As stocks stumble and cryptocurrency markets reel from a steep $400 billion correction, JPMorgan analysts warned in a Monday morning research note that other risky pockets in the broader market, including buzzy special purpose-acquisition companies and clean-energy stocks, are starting to approach bear market territory, unraveling the massive gains priced in under the longest bull market in history as investors worry about problematic inflation ahead.

Though global stocks are only down 2.5% from their peaks in April and May, some stock indexes—including the tech-heavy Nasdaq—are down about twice as much in a telltale sign that “markets are expensive and inflation is running hot” enough to doubt the central bank policy that’s been supporting economic growth, JPMorgan analysts wrote in a Monday note.

Headlining the stark reversal of fortunes, the value of the world’s cryptocurrencies—after roughly tripling this year—has crashed nearly 18% from a Wednesday high due in large part to a slew of negative tweets from billionaire Elon Musk, a vocal cryptosupporter who’s recently soured on the world’s largest cryptocurrency.

Meanwhile, clean energy stocks, which tripled last year in anticipation of sweeping progressive climate legislation, have fallen more than 35% since January as the broader tech sector slips and inflation hikes up the prices of the commodities necessary to manufacture products in the field.

Blockbuster public-market debuts have been a hallmark of the pandemic stock market—with new listings from Airbnb, Coinbase, DoorDash and more—but after soaring more than 100% in a year to a peak in February, newly listed U.S. stocks are down 26%, according to the Renaissance IPO ETF.

It gets even worse for SPACs (themselves a frothy market indicator) and the companies they’ve taken public, which have plummeted an average of nearly 38% from a February high, according to the first-ever SPAC ETF.

That big drop is in line with the 34% plunge the ARK Innovation ETF—a fund invested in “disruptive” tech and whose biggest holding is Tesla—has witnessed since February.

Crucial Quote

“All of these moves are consistent with a chain reaction that occurs when markets are expensive . . . but the ecosystem connecting the economy, markets and the [Federal Reserve] isn’t a nuclear power plant destined for meltdown,” JPMorgan analysts led by John Normand wrote Monday, pointing out that past market cycles have shown about 80% of “seemingly expensive asset classes” that crash in one business cycle end up returning to previous highs in the next cycle.

Key Background

Analysts agree that the Federal Reserve’s unprecedented pandemic stimulus efforts have helped lift stocks and other assets to meteoric new price highs. However, concerns that pent-up demand and an economy awash with cash could spark problematic inflation and force the Fed to rethink its policy are now starting to rock the market. Stocks posted their worst week in three months last week, and at the same time, other assets have become increasingly sensitive to unpredictable shocks—most notably in the crypto market’s volatile reactions to Musk’s hot-and-cold tweets.

What To Watch For

“An inflation-induced stock market correction is possible, but an inflation-fueled shift in market leadership is more likely,” analysts at wealth advisory Glenmede wrote in a Monday note to clients, echoing commentary from other experts predicting that value stocks in recently hard-hit sectors like energy and financials will lead the market this year, as opposed to longtime market leaders in technology.

Tangent

Noteworthy investments to protect against inflation include energy stocks, gold and Treasury bonds indexed to inflation (also known as TIPS).

Further Reading

Elon Musk Sends Bitcoin Tumbling With A One-Word Tweet (Forbes)

These Solar Stocks Were Among The Worst Performers Of The Week. Here’s Why. (Forbes)

Stocks Finish Rough Week Down Over Rising Inflation Fears (Forbes)

I’m a reporter at Forbes focusing on markets and finance. I graduated from the University of North Carolina at Chapel Hill, where I double-majored in business journalism and economics while working for UNC’s Kenan-Flagler Business School as a marketing and communications assistant. Before Forbes, I spent a summer reporting on the L.A. private sector for Los Angeles Business Journal and wrote about publicly traded North Carolina companies for NC Business News Wire. Reach out at jponciano@forbes.com.

Source: The 12 Best Laptops For Working, Studying, Creating And Playing Anywhere You Can Imagine

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References

Surowiecki, James (January 5, 2009). “WHAT PRECIPITATED THE STOCK MARKET CRASH OF 2008?”. The New Yorker.

 

Investors Can Sleep on These 3 Dividend Stocks

Investors Can Sleep on These 3 Dividend Stocks

In a time of economic uncertainty, there is something to be said about low-risk dividend stocks. Companies whose fortunes aren’t directly tied to economic health and that pay a reliable dividend can be a comforting investment to those that aren’t keen on taking on a lot of risk.

Here we highlight three stocks that offer a steady dividend and some peace of mind as the economic recovery unfolds. They aren’t likely to make you rich anytime soon, but they will make for some more restful nights ahead

Is Coca-Cola Still a Buy-and-Hold Stock?

If Coca-Cola (NYSE:KO) is a refreshing investment for value legend Warren Buffet, it should be good enough for the rest of us. Regardless of the economic backdrop, there will always be consumer demand for sodas, juices, teas, and other beverages.

With this said, restrictions on large gatherings during the pandemic have impacted Coke’s recent financial performances and brought more volatility than usual to the stock. However, with the worst likely over, the company appears to be on the path back to more normalized sales patterns. As family picnics and outdoor concerts gradually return along with restaurant traffic, Coke should start to see higher volumes based on group size rather than stockpiling.

Despite recording 11% lower revenue in 2020, Coke kept its dividend hike streak going serving up a $1.64 payout to loyal shareholders. The 2.4% dividend increase made it 59 straight years of higher dividends.

In the near-term Coke is a conservative way to play the economic reopening theme. Its beverage portfolio is more in tune with health and wellness trends with brands like Vitaminwater, PowerAde, and Minute Maid. As activities like youth sports and amusement park attendance normalize, Coke’s performance should improve.

Longer-term Coke’s rising dividend and defensive nature make it the classic buy and hold stock. So, investors can simply opt to have what Warren’s drinking.

What is a Good Non-Cyclical Dividend Stock?

Speaking of defensive stocks, Unilever (NYSE:UL) is about as non-cyclical as its gets. The U.K.-based consumer products giant is the company behind many of our favorite personal care and food items. Dove soap, Axe body spray, Q-tips, and Vaseline are all Unilever brands. So too are popular indulgences like Ben & Jerry’s ice cream, Lipton iced teas (and soups), Hellmann’s mayonnaise, and even the beloved Popsicle brand.

Unilever is definitely, a mature, low growth business, but sometimes slow and steady wins the race. After rising 9% and 6% in 2019 and 2020, respectively, the low volatility stock is down approximately 8% this year offering investors a good chance to stock up.

Although the elevated demand for Unilever’s food products has waned in recent quarters, it’s pretty much a sure bet that people will still be scooping up their go-to items as shopping patterns normalize. And as usual, this should lead to some solid profits for Unilever and sizeable dividends for shareholders.

Unilever has one of the strongest balance sheets in its peer group that supports an ability to pursue growth opportunities such as product expansion and establishing a greater presence in developing markets. The ADR currently has a 3.4% trailing dividend yield which about twice the average dividend yield of the consumer staples sector. This is an easy stock to throw in the cart as a core long-term holding.

Is it a Good Time to Buy 3M Stock?

3M (NYSE:MMM) has been one of the least volatile U.S. large cap stocks over the last ten years. Although it’s not a consumer defensive company, it’s highly diversified end markets generate some reliable financial results. With broad exposure to the automotive, aerospace, transportation, electronics, and health care industries as well as the consumer space, a downturn in one segment can be easily offset by strength in another.

The company has had some choppy performances in recent quarters. Some of it has related to the pandemic and some has not. Demand for home improvement, cleaning, food safety, and personal safety products has been strong. On the other hand, COVID-19 restrictions have forced the automotive, industrial, office supplies, and oral care businesses to re-evaluate how to adjust to the post pandemic economy.

Fresh off a corporate restructuring, though, 3M looks to be in a good position to capitalize on improving conditions in its key markets and achieve its earnings growth goal. Management is aiming to reduce annual operating expenses by at least $250 million. Based on the initial progress, this looks feasible and should drive higher margins and steady single digit growth over the long-term.

3M consistently rakes in some $30 billion in revenue each year and even in slow or no growth years it rewards shareholders with a higher dividend. In fact, 3M has gone toe to toe with Coca-Cola in raising its annual dividend in each of the last 59 years. The Dow Jones index mainstay has a 3.1% dividend yield and at 23x earnings is trading at the lower end of its historical valuation range. It deserves to be a mainstay in any long-term investment portfolio.

By: MarketBeat

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Sleep Deprived Financial Traders Make Lower Stock Market Returns

Do financial traders make better returns in the stock market when they are well rested? You would intuitively assume that a trader’s level of sleep would affect their decision making.

Several studies have certainly shown that sleep affects the ability of people to make decisions in general. Though admittedly based on small samples of participants, these studies show that those who are short on sleep tend to have relatively low attention to detail, poor memory, poor performance and significant mood swings.

But when it comes to whether sleep affects financial decisions, the evidence has been mixed. The only measure of sleepiness that has been used is the annual clock changes for daylight saving that take place in many countries, since they disturb many people’s sleep. A few studies have used this to look at how stock market returns are affected on the Mondays directly after the clocks go back or forward by an hour.

One such study in 2000 concluded that returns were relatively low when traders lacked sleep, and suggested that the lack of sleep might make them more risk-averse because they were anxious and struggling to concentrate. But later studies, such as this one from 2002, suggested that the correlation between sleep and cautious investing might not be as strong empirically as initially thought.

My work

Daylight-saving time changes have the advantage that we all have to adjust them, but they are far from an ideal proxy for sleep since they only occur twice a year, and the impact on people’s sleep is relatively small since the clock only changes by an hour. This might explain why the research evidence has been mixed in this area.

To try and improve our understanding in this area, I undertook a pilot study of a fund manager in England, analysing his investment transactions in the context of sleep data that he recorded in a diary.

I found that his sleep patterns did indeed influence his investment decisions. In line with the theory from the 2000 study, the fund manager made fewer transactions when he was short on sleep.

To see whether there was a wider correlation, I sought to develop a new proxy for sleep. We know that around 80% of people search for information online about their health issues, and there is no reason to believe that investors behave any differently. I also knew that Google data has been used by researchers to measure investor attention to individual stocks.

I therefore created a sleepiness index based on the extent to which people in the US were searching Google for 28 relevant terms including “sleep deprivation”, “sleeping pills” and “jet lag cure”. Some of these terms came from allowing the Google algorithm to offer up potential sleepiness terms based on suggested autocompletes.

The more that people searched for things to do with sleepiness, the greater the indication of sleep difficulties. Unlike the time changes from daylight saving, my index has the advantage of being based on daily data, and can measure a much wider range of sleepiness. To test its validity, I checked the index against times that we would normally associate with sleepiness, including daylight-saving time changes and also sunrises and sunsets. Sure enough, sleepiness-related Google searches increase at these times.

The index confirmed that stock-market returns are indeed quite low on days that traders are short on sleep. For every 1% daily increase in sleep difficulties across the population, stock-market returns fell by 0.14%. I also found that these patterns reversed on subsequent days, which may mean that traders realise that their initial decisions were poor and take steps to correct them.

What next from a research point of view? Researchers could potentially use the data from sleep apps to get more accurate measures of the relationship between stock market returns and the population’s sleepiness over time. No doubt the better we understand this, the more that traders will be able to use it to their advantage.

My work is another example of how online search data can shed new light on old research subjects. There are surely lots of other ways in which the academic community can use it to understand other factors that influence our decisions.

By: Antonios Siganos  Senior Lecturer in Finance, University of Glasgow

Source: Sleep-deprived financial traders make lower stock market returns – new research

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player.captivate.fm – Today[…] You know when you start feeling sleep deprived, how the world doesn’t feel real anymore? But then we figured out the cost to actually produce th […]N/A

Sleep Hygiene
ipccontent.advisorstream.com – Today[…] in order to get more things done or to rely on a cup (or more) of coffee to keep you going when sleep deprived […]0

Your Daylight Saving Time Questions Answered – The New York Times
http://www.nytimes.com – Today[…] “Not only are we sleep deprived but we’re trying to force our brain into a little bit more of an unnatural sleep schedule,” said Dr […]4

Acknowledging Preindustrial Patterns of Sleep May Revolutionize Approach to Sleep Dysfunction
http://www.psychiatrictimes.com – Today[…] that under our current conditions, we may fall asleep so quickly because we are chronically sleep-deprived […] Are we chronically sleep deprived? Bull Psychonomic Soc […]2

‘Almost inhumane’: Treating the complex problem of physician fatigue
http://www.tvo.org – Today[…] I completely forgot to check on this, because I was so sleep-deprived […]5

Chick-fil-A Opens In Linden: Top News Of The Week | Clark, NJ Patch
patch.com – Today[…] Aside from being sleep deprived, she finds this […]1

6 ways to feel less tired after daylight saving 2021
http://www.reviewed.com – Today[…] “We tend to crave sweets when we’re sleep-deprived,” Aronson says […]1

As Bipartisan Bill Moves To End Daylight Saving Time, A Review Of Why It’s So Bad For Our Health
gothamist.com – Today[…] even more: this Mayo Clinic found that DST could lead to “an increase in medical errors” because of sleep-deprived healthcare workers […]7

Belfast named as UK’s most sleep-deprived city – BelfastTelegraph.co.uk
http://www.belfasttelegraph.co.uk – Today[…] In a report compiled by a UK mattress firm, Belfast was picked as the most sleep-deprived city in the UK […] Between the start of 2020 and 2021, searches for sleep-deprived terms were said to have increased by nearly a third (30%) […]15

Four incredible benefits of CBD oil for dogs – FingerLakes1.com
bestcann.com – Today[…] When serotonin levels are low, canines become sleep-deprived, unhappy, and less sociable […]N/A

We must work together to make kitchens more inclusive
http://www.sodexo.com – Today[…] a global movement fighting for a more resilient and sustainable industry, 74% of chefs feel sleep deprived to the point of exhaustion; 53% of chefs feel pushed to breaking point; and 1 in 4 chefs ha […]0

Review Finds LAPD Failures Led to Mishandling of Summer Civil Unrest
http://www.asisonline.org – March 12[…] If they are sleep deprived, decision making could be impacted, which then has the potential to affect the success of th […]0

10 WEIGHT LOSS Life Hacks to LOSE WEIGHT FAST and EASY! (Tips That Actually Work)
thebestwaystoloseweight.net – March 12[…] habits can cause you to gain weight for one your metabolism does not function properly when you’re sleep-deprived secondly “youve had” the starvation hormone ghrelin that tells you when to eat when you hav […]0

TEA-rrific Creatures
http://www.sophsscrawls.co.uk – March 12It all started one early sleep deprived morning, whilst making a cup of tea I dropped the rather hot tea bag onto my open sketchbook […]0

Large cognitive fluctuations surrounding sleep in daily living
http://www.cell.com – March 12[…] Body posture affects electroencephalographic activity and psychomotor vigilance task performance in sleep-deprived subjects […] Cognitive performance, sleepiness, and mood in partially sleep deprived adolescents: the need for sleep study […]0

Light painting 101: Five easy steps to illuminating cyanide tanks carved with guerrilla art
photofocus.com – March 12[…] to weird music, stay out all night creating photos, get dirty, hang out with other creative sleep-deprived weirdos, see the stars drift across the sky and always find the best taco stands whil […]3

A year of the pandemic in your words – the examined family
courtney.substack.com – March 12[…] I have felt a deep darkness I have only experienced once before in my life, when chronically sleep deprived after my second child was born and wouldn’t sleep through the night for a year and a half […]2

Belfast people have more trouble sleeping than anywhere else in the UK, new study shows
http://www.irishpost.com – March 12[…] The study found that for every 100,000 people in Belfast, sleep-deprived terms were searched for 1,931 times […]1

5 reasons we won’t be giving up our weekend lie-ins right now
http://www.independent.co.uk – March 12[…] However, if it becomes a ‘need to have’ because we’re sleep deprived during the week, that’s a concern […]2

J.K. – Identity Crisis – Track by Track
1883magazine.com – March 12[…] I actually initiated the writing of this song when I was extremely sleep deprived, and I almost forgot (while compiling the track list) that I wrote it […]0

The Importance of Sleep for Kids
http://www.sleepgallery.biz – March 12[…] We all know what it’s like to attend an important class or meeting while sleep deprived […]1

Sleep maximizes vaccine effectiveness
medicalxpress.com – March 12[…] Up to 10 days later, the sleep-deprived individuals possessed half the number of vaccine antibodies than the non-sleep-deprived controls […]N/A

Sleep Maximizes Vaccine Effectiveness
http://www.newswise.com – March 12[…] Up to 10 days later, the sleep-deprived individuals possessed half the number of vaccine antibodies than the non-sleep-deprived controls […]N/A

Mental health and alcohol/drug use during the COVID-19 pandemic
positivechoices.org.au – March 12[…] “Let’s talk about sleep”: a qualitative examination of levers for promoting healthy sleep among sleep-deprived vulnerable adolescents […]145

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